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Glossary

This glossary is arranged in alphabetical order. Click on a letter in left column or scroll down to search.

< V >

Vanishing Premium:

On many forms of cash value life insurance the premiums can "vanish" or be discontinued. The premium can vanish when the cash accumulation account (less any policy loans) exceeds the projected net single premium for all the future benefits. It is very important to understand that this calculation is generally based upon current assumptions including interest rates and dividends on par policies. If the interest rates, policy expenses or mortality experience changes, additional premiums may become due in order to maintain the policy.

Volatility:

Volatility refers to swings in the value of an investment. Such swings in value may be caused by changes in the overall market or they may be due to specific changes effecting a particular investment. Volatility is a form of risk. Of the basic investment categories over the long run, small capitalization equities (stocks of smaller companies) show the greatest volatility, followed by large capitalization equities (stocks of large companies, like the S&P 500), then long term fixed instruments (bonds, like in the bond fund), and then money.

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